Taiheiyo Cement secures Japan's first transition-linked loan

Taiheiyo Cement Corp has raised capital from the Development Bank of Japan Inc through a transition-linked loan, marking the first time transition finance has been secured by the cement industry in Japan. According to the company, transition-linked loans are a financing framework designed to support companies working to reduce greenhouse gases in line with strategy, linking the borrower’s performance against predetermined Sustainability Performance Targets (SPTs) with the terms of the loan. 

For the SPTs of this loan, two mid-term targets for 2030 have been set, which are milestones for achieving carbon neutrality throughout Taiheiyo’s domestic and overseas supply chain in 2050. The first target is to reduce CO₂ emissions intensity in the supply chain by 20 per cent from the 2000 level. The second is a 40 per cent reduction in domestic CO₂ emissions compared to 2000.

“To qualify for the transition-linked loan, we obtained a third-party assessment by the Japan Credit Rating Agency, Ltd to confirm that it complies with the "Sustainability-Linked Loan Principles" established by the International Capital Markets Association (ICMA) and "Climate Transition Finance Handbook" established by the International Loan Markets Association (LMA). We have also been approved for Climate Innovation Finance Grants Scheme by the Ministry of Economy, Trade and Industry,” said the company in a statement. “We will continue to work steadily to reduce CO₂ emissions in accordance with our Carbon Neutral Strategy 2050 in order to realize a decarbonisation society."